Figure 1.

Rydex Bullish and Leveraged to Bearish and Leveraged/ daily

1) The ratio of Bullish and Leveraged to Bearish and Leveraged: 2.87

2) Values <=1 (below blue line) means more bears than bulls and typically this is
bullish for prices

3) Values >=2 (above red line) means more bulls than bears and typically, this is
bearish for prices
Figure 2. Rydex Money Market Fund/ daily

1) High indicator value suggests fear as investors are seeking the safety of the
money market fund; this is bullish for higher prices

2) Low indicator value suggests complacency as investors are fully invested; this is
bearish for higher prices

3) The trading bands are set to identify values that are 2 standard deviations above
normal over the past 40 trading days
Figure 2a. Rydex Buying Power/ daily

1) The Rydex Buying Power indicator assesses the amount of money on the sidelines;
it is “fuel” available for buying

2) This indicator assesses considers both non – committed money (i.e., assets in the
money market fund) and committed money (i.e., assets in all of the bearish funds
that could potentially wind up in bullish funds) as available money on the sidelines

3) The indicator is calculated by taking the sum of all assets in bearish plus money
market funds divided by all assets in bullish plus bearish plus money market funds

4) Low indicator values suggest little money on the sidelines and are consistent with
excessive bullishness (i.e., bear signals)

5) High indicator values are consistent with increased buying power and are
consistent excessive bearishness (i.e., bull signals)
Figure 3. Rydex Relative and Absolute Combination Indicator/ daily

1) When the indicator is green  bullish for higher prices

2) When the indicator is red  bearish for higher prices

3) The indicator uses the total amount of assets in all bullish funds and the total
amount of assets in all bearish funds; the indicator looks for both relative and
absolute extremes in the data
Figure 4. Rydex Combo Indicator/ daily

1) Figure 4 is a composite indicator constructed from figure 1, figure 2a, and figure 3.
Figure 5a. $VIX/ daily

Figure 5b. $VXN/ daily

Figure 6. Rydex Total Bull v. Total Bear/ weekly

1) The indicator uses the total amount of assets in all bullish funds and the total
amount of assets in all bearish funds

2) The indicator attempts to identify multi – week swings

3) When the indicator is green, Rydex investors are bearish and there are more
assets in bearish oriented funds than bullish oriented funds; in general, this is
bullish for higher prices

4) When the indicator crosses above the signal line, prices tend to move higher

5) Indicator values >=58% lead to intermediate term tops

Figure 7. Rydex Buying Power/ weekly

1) The Rydex Buying Power indicator assesses the amount of money on the sidelines;
it is “fuel” available for buying

2) This indicator assesses considers both non – committed money (i.e., assets in the
money market fund) and committed money (i.e., assets in all of the bearish funds
that could potentially wind up in bullish funds) as available money on the sidelines

3) The indicator is calculated by taking the sum of all assets in bearish plus money
market funds divided by all assets in bullish plus bearish plus money market funds

4) Low indicator values suggest little money on the sidelines and are consistent with
excessive bullishness (i.e., bear signals)

5) High indicator values are consistent with increased buying power and are
consistent excessive bearishness (i.e., bull signals)
 My Comments

1) Another up day on weak volume

2) This is reminiscent of the run up in late April to the early May highs

3) There was a sudden sell off that was quickly bought – sentiment remained extremely
bullish

4) The ascent in late April was on decreasing volume

5) Once again, prices are moving back towards the May highs on light volume

6) Looking at figure 5a we note that resistance for the SPY is 136.6

7) Looking at figure 5b we note that resistance for the QQQ is at 59.31

8) Of note today’s high in the QQQ was 59.28

9) From my perspective, the continued ramp on decreasing volume and increasing bullish
sentiment has become increasingly frustrating as day after day I must tell you how bearish
this is

10) But it doesn’t matter to the market but at some point it will

11) You could argue that I should trade what I see (i.e., an uptrend) not what I believe is going
to happen

12) And that is my point here….despite what I see, I am unwilling to throw caution to the wind
and just load up because the market never goes down

13) I really don’t have an opinion either way nor a crystal ball

14) The odds are that fear and greed will play out like it always does